Can DISH Satisfy AT&T's Needs?

Hear that stomach growling? If you've been keeping up with the merger-gone-sideways world of AT&T (NYS: T) , then you know that noise is caused by the company's unmet appetite for wireless spectrum.

The proposed merger with T-Mobile that AT&T finally gave up on in December would have given it the spectrum it needed to better compete with Verizon (NYS: VZ) in their race to build superfast 4G LTE networks. To add injury to insult, AT&T not only failed to get that spectrum from T-Mobile, but it now must give T-Mobile some of its current spectrum -- along with $3 billion in cash -- to pay a penalty for the deal's failure.

And to pile on further, while AT&T's lawyers and lobbyists were pounding the pavement between the Department of Justice and the Federal Communications Commission trying to get the merger approved, Verizon was busy making its own spectrum-grabbing deals. Also in December, just before AT&T threw in the merger towel, Verizon made a deal with three cable companies -- Comcast, Time Warner Cable, and Bright House Networks -- to acquire a large cache of spectrum.

So, not to mince words: AT&T is desperate for more wireless spectrum. And when you add that desperation to the finite amount of spectrum that is out there, AT&T is on the wrong side of a seller's market for spectrum.

That brings us to DISH Network (NAS: DISH) , which happens to hold a bundle of spectrum that may have AT&T's mouth watering. Last week, DISH CEO Joe Clayton was interviewed on Bloomberg Television, where he said: "We're open to all possible options. We could be acquired or we could be the acquirer." If AT&T happens to become the acquirer, it would certainly have to pay a premium. Money manager Kevin Shacknofsky of Alpine Mutual told Bloomberg that paying "$50 [for a DISH share] is not cheap but reasonable." At the time of this writing, DISH shares were selling for under $28.

Other spectrum-grabbing scenarios for AT&T could include plays for Leap Wireless (NAS: LEAP) or MetroPCS (NYS: PCS) . However, looking at how well AT&T's T-Mobile acquisition turned out, maybe trying to acquire another wireless carrier lock, stock, and barrel may also be looked at askance by the regulators.

AT&T does have a tough row to hoe, but I wouldn't bet against it. Ironically, the antitrust issues that doomed its T-Mobile merger may actually play in its favor here. If the FCC and DOJ wouldn't let that merger happen because it would create an overpowering duopoly of AT&T and Verizon, what would it think about a mobile-carrier playing field that had only one viable major carrier: Verizon? Given that, I wouldn't be surprised if Verizon's deal with the cable companies gets a closer look than it has received so far. If that deal gets axed, too, then the horizon looks brighter for AT&T.

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